Increased exposure of the French public to investment scams


The Autorité des Marchés Financiers (AMF), it its capacity as the regulator of the French financial markets and the authority tasked with the supervision of the orderly operation of such markets is always a vocal and proactive advocate of consumer rights and their protection. Within the framework of its mandate and spurred by fact that is has observed a steep increase in new alternatives to traditional financial investments being offered to the public, especially through the internet, it has commissioned a survey carried out by CSA, a specialized market research agency and consultancy.

The purpose was for the AMF to use the findings of the survey in order to obtain a clearer understanding of the scale of the situation in France with the regards to the offers marketed as investment opportunities, ranging from betting on the forex market to trying out binary options or investing in unusual assets such as rare earths, metals or stamps, as well as surveying the associated scams and swindles reported by consumers.

Through an announcement, the AMF publicized the two key findings of this survey. The first is that 9% of French people say that they have invested in offers of this type (i.e. forex trading/binary options and/or investments in miscellaneous assets). More specifically, the survey results indicate that 62% of French people have heard of such offers, 28% say they have been in contact with or actively approached by companies offering these investments and 9% say that they have invested in one of them.

The population segment with the greatest exposure to such investments was found to be men, people under the age of 35, and people in the “manager” or “associate professional” socio-professional categories.

The second, and perhaps most alarming key finding of the AMF commissioned survey was that 5% of French people say that they have been the victim of a scam involving this type of investment. Those of the respondents who have fallen victim of fraud mentioned issues  such as not receiving the expected return, losing their initial outlay without being informed about the risks, or being unable to contact the company.  Fortunately, the survey has indicated that in most cases, losses were estimated to be less than €500 per customer.

According to the AMF, the survey results confirm that the general public is heavily exposed to this type of offers, while the French watchdog also highlights that the Epargne Info Service, its consumer helpline, reported an almost 30% increase in 2015 in inquiries concerning the foreign exchange market or binary options, which accounted for 41% of all the inquiries handled by the helpline.

The AMF also availed itself of the opportunity to remind once again that it regularly issues warnings concerning unusual investments and to point out that these offers are not subject to the protective framework in place for financial instruments. In this sense, they are highly risky, may be unadvisable, and in some cases act as fronts for scams, concludes the AMF announcement.